This is the first in an occasional series on estate planning for local Bermudian citizens, dual-citizens with ties to US / Canada / UK and US citizens living abroad . In the not too distant future, we will also be featuring a series of informational articles on Protecting your Retirement.Good grief, you must be thinking, here we are heading into Christmas time, the season to be joyous, be festive and just enjoy your community, and you want me to plan for my hereafter. I don’t think so, you say, but please do think again. The Holidays are the most stressful time for many people; depression, regrets, family infighting and self-induced pressure to be perfect can all take a terrific toll on the psyche.

Some of the stressors that come into play within family circles are the very ones that could be avoided by putting plain simple easily understood estate planning into place, early. We all know the classic example. We may have even experienced it. One family member no longer communicates with another because he “got more than I did when Mom passed on”, because she always liked him best.

Do you have a properly executed will that provides for your families’ needs in a thoughtful careful loving and clearly designated manner?

I’ll leave you to answer that. There are many good reasons to make a will — but we’ll leave them for now and discuss what happens when you just never get around to it. It’s hard you know, none of us want to face our mortality. It is so much easy to put that off until last, then last is all there is left.

In Bermuda, the law of intestacy is governed by the Succession Act 1974. Passing to your great reward without leaving a valid will is known as dying intestate. Since no one at that point (other than you and you are gone) knows what to do with anything, the Courts decide for you — from the grave as it were by utilising the Succession Act.

This process kicks in to dole out your net estate (after legal and filing fees, liabilities, stamp duty and other costs) according to a set formula that may bear no resemblance whatsoever to how you wanted to dispose of your assets, or care for the needs of your immediate family.

For instance:

One: If you and your spouse have no children, your spouse will inherit your entire residuary estate, but there is a catch. He/she will inherit all only if your parents, full brothers or sisters, or their children died before you did.

If, for instance, your parents are still alive, your spouse will receive your personal possessions, house contents, boat, car and no more than two-thirds of the remaining assets or $150,000 whichever is greater.

Your surviving parent(s) will receive the final one-third. If both of your parents have passed away, the final one-third remaining won’t go to your spouse but to your surviving brothers and sisters equally or to their children.

Two: If your spouse and your children outlive you, your spouse gets an even shorter end of the stick. She/he will receive no more than 50 percent of your remaining assets or $100,000 whichever is greater. The remaining 50 percent is given equally to your children. This edict creates problems when a considerable fortune is left to minor children and no one is capable of managing these investments.

Another body blow to the grieving spouse occurs when it is learned that transfers to spouses are exempt from stamp duty at death, but your estate may be liable for stamp duty of up to 15 percent on the taxable assets left to your children — that remaining 50 percent has just been considerably reduced, and you still have to raise and educate these children.

Three: Overvaluation of the family home. Under the Succession Act rules, if the family home is worth more than your spouse’s entitlement to your estate (that is two-thirds or fifty percent), your spouse can still keep the property, but he/she must pay the difference between what he/she is allowed back to the estate where it is distributed to the remaining beneficiaries.

How many spouses have that type of liquidity in land-rich cash-poor Bermuda?

We don’t know what arrangements the court can or will make if the spouse can’t beg, borrow or steal sufficient cash to keep what she/he has considered to rightfully theirs all their life.

Four: Uncle Scrooge and Aunty Meanie become Guardians of your dear children. Regardless <$>of whether the chidren like these people or not, if no Will exists, particularly in the case of a single mother, the Supreme Court may appoint a guardian who may be considered a more suitable guardian than even the child’s biological father.

The court takes the position that it is always obliged to act in the best interest of the child(ren).

Most people have no idea these types of situations can actually happen. I urge you to take the time during the holidays to celebrate your life, and plan for your legacy.

Now, to end with a real doozie — taken directly from probate court filings in the United States which still has a fairly punitive estate tax regime. Marilyn Monroe, Elvis Presley and the head of one of the Big Four accounting firms all died without leaving a will. Their estates paid from 55-73 percent of the value of the assets to US Internal Revenue Service before the beneficiaries received a dime. Even the most well-intentioned ...

Next: Ever wonder why there are so many abandoned homes in Bermuda? Have you any idea what will happen to your foreign estate when you die? Stay tuned.Martha Harris Myron CPA CFP|0xae| is a dual citizen, Bermudian / US. She specialises in investment advisory services and planning lifestyle transitions and rewarding retirements. DirectLine: 294-5709 Send e-mail to marthamyron[AT]northrock.bm The article expresses the opinion of the author alone.

Under no circumstances is the content of this article to be taken as specific individual investment advice, nor as a recommendation to buy/ sell any investment product.